NEW DELHI: Coca-Cola’s Asia Pacific region head has told its India employees that fizzy drinks will remain its core focus area even as he called for innovation to grow its portfolio of no-calorie products, two company officials said.

“We see abundant opportunity in the beverage industry and in the sparkling (carbonated drinks) category,” John Murphy told the firm’s employees earlier this week, on his first visit to India after being named successor to Atul Singh as Coca-Cola Asia Pacific president in May.

“The long-term growth of the beverage industry is being propelled by globalisation, urbanisation and growth of the middle class,” he said while addressing the company’s India leadership and employees at its headquarters in Gurgaon.

The officials who attended the town hall meeting shared some of Murphy’s quotes with ET. Interestingly, Coca-Cola’s rival PepsiCo’s CEO Indra Nooyi had earlier this year said the beverage and snacks maker would reduce its reliance on colas through innovation across its portfolio.

Both Coca-Cola and PepsiCo have been struggling to keep up their growth momentum with sales of carbonated drinks slowing to low single digits over the past six quarters at least as consumers cut down on discretionary spends and increasingly opt for healthier drinks such as juices and functional drinks.“

The stills (juices, juice drinks, water) business is a more fragmented set of categories and we have ample opportunity to follow a plan which is similar to the sparkling (carbonated) business,” said Murphy who heads 36 countries across the Asia Pacific region including China and Japan. He met key stakeholders including Coca-Cola bottlers in the country.

ACoca-Cola spokesperson confirmed Murphy’s visit to several markets in Asia-Pacific including India over the last couple of months. “He is spending time with respective business unit teams, learning more about those businesses and their plans going forward,” the person said. Despite increasing popularity of juices, juice drinks and other functional beverages, aerated drinks contribute two-thirds, or close to 65%, to Coca-Cola's volumes in India.

With Coca-Cola and Thums Up colas and Sprite and Limca lemon drinks, Coca-Cola India leads the aerated drinks category in the country with a combined share of about 57%, said an industry official quoting researcher Nielsen’s data. In his address to Indian employees, Murphy said, “We will have to change the way our portfolio looks.

We are going to have to innovate in creating new products and also in growing the no-calorie products within our portfolio,” he said. While the no-sugar Coke Zero had crossed sales of Rs 100 crore within one year of its launch, Coca-Cola is currently test marketing Sprite Zero.

The lemon-line Sprite has the highest share among aerated drinks in the country. “We have to move from an idea of offering choice to an idea of shaping choice,” said Murphy who has worked with Coca-Cola for 28 years now.

“Driving innovation, growing local winners and expanding distribution is the foundation of what we have been doing not just in products but also in packs, coolers, chillers, shelf spaces, retailing aisles, and so on,” he said, stressing the need for local innovation.

Murphy also stressed on the importance of continuing to develop local and global talent. India is the sixth largest market for the Atlanta-based beverage firm that also makes Maaza mango drink, Minute Maid juice and Kinley water.

Before being elevated to his current position, Murphy was heading Coca-Cola’s South Latin business unit that included markets such as Argentina and Peru. In May, Coca-Cola chief operating officer James Quincey, largely tipped to take over as the chief executive from Muhtar Kent, had announced sweeping changes in the company management across its Asia and Africa businesses, which analysts said was aimed at reviving profits and sluggish sales of soda across key markets.

Quincey had said the new structure should be more efficient and that the leadership changes will bring “freshness” to markets. For the April-June ’16 quarter, the US firm posted year-on-year revenue drop of 5%, due to lower sales in each of its regional units, except in North America and flat global unit case volume.